Our View: Government is correct to end its funding of Cyprus Rally

It was about time the finance ministry ended the state funding of the Cyprus Automobile Association (CAA), a private entity, for organising the Cyprus Rally. There was no transparency in this bizarre arrangement in which the state, every year, handed over the amount asked for by the association, which spent the money as it saw fit, without providing any documentation on how the funds were used.

This arrangement has been in place for decades, with the CAA being given money on the grounds that the Cyprus Rally, raised the profile of the Republic and promoted the island as a tourist destination. While this may have been true in the seventies and the eighties, it is not valid today. Cyprus is pretty well-known nowadays and does not need a rally to raise its international profile even though being in the World Rally Championship calendar has benefits for the country.

The CAA has always dealt directly with the international automobile federation (FIA), with regard to the Cyprus Rally’s organisation, logistics and finances, while the government has been in the dark about how its money was being spent. Between 2003 and 2021, an amount of €10.3 million was paid to the CAA, varying from €900,000 in 2010 to €500,000 the following year. In 2019 the amount was fixed at €500,000, on the understanding the rally would find sponsors from the private sector.

The thinking, according to finance minister, Constantinos Petrides, was that sponsorship should have been secured. It was incredible that the Cyprus Rally did not secure a cent in sponsorship, considering 70 per cent of the expenses of the Acropolis Rally were covered by private sponsors, said Petrides. Why would the Association bother with sponsorship when the state was happy to pick up the bill, without even asking to know how its money was spent?

There was no Cyprus Rally this year, for the first time since 1974-75, and the government has refused to commit to funding four rallies from 2023 to 2025 that were offered by the FIA. Meanwhile the CAA cited a Deloitte study, claiming the rally would attract a TV audience of 100 million over the four-year period, giving a direct benefit to the economy of €30 million; it also estimated another €90 million in indirect revenue.

While it would be good to keep the Cyprus Rally going, since it is part of the international motorsports calendar, the old arrangement of handing over the taxpayer’s money to the CAA, no questions asked must end. The government, perhaps should consider inviting tenders for the organisation of the rally, but if the FIA insists on dealing only with the CAA, then conditions should be set, such as, the securing of sponsorship and the submission of audited accounts on the organisation and holding of the rally, before the government offers any funding.

The old arrangement must be abandoned even if it means the end of the Cyprus Rally.